The disruptive COVID-19 pandemic has wreaked havoc on the U.S. retail market. Nevertheless, cannabis has persevered. Most U.S. states with a legal cannabis industry—medical or recreational—quickly deemed cannabis retailers essential businesses, allowing them to operate during even the darkest days of the pandemic. Cannabis is pandemic-resistant.
In late September, BDSA, Boulder, CO, released its latest sales report, noting that global cannabis sales for 2020 will likely reach $19.7 billion, an increase of 38 percent over 2019’s sales of $14.8 billion. Over the longer term, BDSA predicts global cannabis sales will reach $47.2 billion by 2025, a compounded annual growth rate (CAGR) of 22 percent. BDSA only had to reduce its earlier 2020 forecast by 1 percent to compensate for some minimal impact of the pandemic. Canada’s market is poised to grow to $6.1 billion by 2025, with a CAGR of 26 percent.
BDSA predicts the U.S. market will reach $34.5 billion by 2025, with a CAGR of 18 percent. The largest cannabis category in the U.S. is flower, but BDSA forecasts that the dominance of flower will decline by 2025.
In the press release accompanying this new data, Roy Bingham, co-founder and executive chairman, BDSA, reports: “Sales in many U.S. markets performed stronger than expected, resulting in upward forecast revisions for Colorado, Illinois, Michigan, New Mexico, Oklahoma, and Oregon, while sales in Nevada dropped significantly and are struggling to recover. Nevada’s dependency on tourism, coupled with mandated delivery for the adult-use channel, were largely responsible for Nevada’s performance.”
The inflection point for exponential growth of cannabis-infused foods and beverages in the U.S. remains FDA regulation of cannabidiol (CBD). Once federal regulators have clinical assurance of CBD’s safety, they can establish a clear pathway for its use in foods and beverages, and traditional retail markets like grocery, drugstores, and convenience stores will subsequently drive significant sales growth.
BDSA research now shows one-third of adults are open to consuming cannabis, but are not yet regularly purchasing products. New product innovation will continue to drive trial of cannabis products—particularly as cannabis-infused food and beverage manufacturers develop more products suited to mainstream shopper demographics.